We recognise that climate change is a significant risk and complex challenge requiring action at all levels – local, state, national and international - and by all stakeholders.
We believe an effective United Nations agreement will:
- provide both context and a framework for national actions and policies
- facilitate international cooperation
- address the challenge of climate change.
It will also support the globally agreed goal to limit global warming to less than 2°C, striving for 1.5°C above pre-industrial levels, as well as giving regard to science-based reduction targets and the policy and market mechanisms necessary to assist in achieving greenhouse gas (GHG) reductions.
An effective international agreement should assist in providing business with the certainty and frameworks it needs to scale up global investment in low carbon technologies and infrastructure and lead to the creation of significant new business opportunities.
We believe the financial sector has an important role to play in assisting the transition to a low carbon economy, through both the energy we purchase directly and through financing. This transition however, needs to take place in a considered and balanced manner, supported by a stable policy environment that can underpin the transition and provide investment certainty over time.
In recognition of the role we can play in supporting the transition to a low carbon economy that limits global warming to less than 2°C, NAB has adopted three “We Mean Business” Coalition climate change commitments1. In addition, we have made further commitments that demonstrate our intention to continue to take a leadership role through how we source energy for our operations and support our customers through financing activities.
1. Undertake financing activities of AUD $70 billion over the ten years to September 2025 to help address climate change and support the transition to a low carbon economy
In the 2019 financial year, the Group reviewed its Climate Change Strategy and increased its environmental finance commitment to support green infrastructure, capital markets and asset finance from $20 billion to $35 billion (taking the Group’s total environmental finance commitment from $55 billion to $70 billion by 2025). This commitment was previously increased in 2017 from $18 billion by 2022 to $55 billion by 2025) and now includes:
- $35 billion to support green infrastructure, capital markets and asset finance
- $35 billion in new mortgage lending flow for 6 Star residential housing in Australia.
Our environmental financing activity includes:
- lending for green commercial buildings
- specialised lending; corporate and securitisation finance for projects that reduce emissions and assist with climate change adaptation; and lending to other low carbon businesses
- asset finance
- green term deposits
- green bonds funding
- advisory activities, underwriting or arranging
- lending for 6 Star Residential properties
Further information on how we calculate our environmental financing is outlined by category in our Environmental Financing Methodology.
We’re the leading arranger (by market share)2 of project finance for renewable energy in Australia, having arranged $9.4 billion in project finance since 2003.
We have increased and broadened our activity, including a number of industry-leading initiatives such as:
NAG participated in eight public green, social and sustainability bond deals and three sustainability-linked loans including:
- Arranging Australia’s largest ever green bond – the $1,800 million TCorp Green Bond; and arranging the world’s first Climate Bond certified green bond for a retail property landlord – $300 million Queensland Investment Corporation Shopping Centre Fund green bond.
- UBank launched the world’s first Climate Bond certified consumer Green Term Deposit. This product won ‘Best Green Innovation’ at the Finder Awards.
In prior years our activity included:
- Launching the first Australian bank green bond and the first bank-issued Climate Bonds Standard certified bond globally to finance A$300m of renewable energy assets.
- NAB has been recognised as a 'Green Bond Pioneer' by Climate Bonds Initiative and London Stock Exchange for our work in developing the Australian green bond market.
- Arranging Australia’s first sustainability bond, Australia’s first green securitisation bond, Australia’s first semi-government green bond, Australia’s first semi-government sustainability bond, Australia’s first US Private Placement (USPP) green bond and the first green bond issued in New Zealand.
2. Source 100% of our Australian electricity requirements from renewable energy sources by 2025
This commitment was increased in 2019 from 50% to 100%. (The commitment was previously increased in 2017 from 10% by 2018 to 50% by 2025). NAB has joined the RE100 initiative – bringing together businesses committed to using only renewable electricity.
Minimising the environmental impact of our business is a key focus of ours. In 2010, we became the first Australian bank to achieve National Carbon Offset Standard certified carbon neutrality and we maintain this through an on-going focus on energy efficiency and other carbon reduction initiatives. We’ve achieved this by:
- reducing the amount of energy we used by our equipment, lighting, heating and cooling
- installing solar panels on branches
- switching from brown coal-fired grid electricity to tri-generation and co-generation at two key sites
- purchasing offsets to neutralise remaining emissions.
Sourcing 100% of the electricity we need from renewable energy sources will continue to reduce our carbon emissions and help scale-up Australian-based low-emissions infrastructure and renewable energy generation.
3. Engage responsibly on climate policy
We will continue to engage in dialogue with key stakeholders, including customers and the wider community, to help inform how we advocate on climate policy with all levels of government. We will also ensure that our engagement on climate policy is co-ordinated and consistent and we will communicate our position, actions and outcomes annually through our CDP climate change survey response and annual report suite of documents.
4. Report climate change information through mainstream reporting channels and increase our carbon risk disclosure in half and full-year results and annual reporting, incorporating stakeholder input
Consistent with our commitment to transparency and integrated reporting, we are committed to identifying, developing and implementing ways to improve disclosure on carbon risk exposure through collaboration with other financial institutions, both in Australia and internationally. We have publicly reported on our GHG emissions since 2003. We are aligning our GHG reporting with internationally recognised climate change reporting frameworks, such as the Climate Disclosure Standards Board’s Climate Change Reporting Framework and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We continue to incorporate disclosure of relevant climate change related information in NAB’s Annual Financial Report and have included carbon-related disclosures in our Half and Full Year Investor Presentations since May 2015.
5. Commit to putting a price on carbon and align to the UN Global Compact’s business leadership criteria on carbon pricing
We first established an internal carbon price in 2010, as part of our commitment to achieve and maintain carbon neutrality. This has helped to drive investment in energy efficiency initiatives and helps us to achieve GHG reduction targets. We will continue to maintain the use of an internal carbon price and publicly communicate our understanding of how market mechanisms can help achieve GHG reductions. NAB will also continue to disclose, in our annual CDP climate change survey response and other relevant corporate publications, how we use our internal carbon price.
6. Set a science-based GHG emission reduction target for our operations
In 2019 we achieved an 18% reduction in emissions against our science-based emissions reduction target to reduce GHG emissions by 21% by 30 June 2025 from a 2015 base year.
We have since announced we will join the Principles for Responsible Banking Collective Commitment to Climate Action in the first quarter of 2020. This will involve NAB: (a) setting targets to align our lending exposures to support the low carbon transition and the Paris Agreement and (b) developing sector-specific plans to support our clients in accelerating the low carbon transition.
7. Commit to transparency and integrated reporting which means we are working to identify, develop and implement new ways to deliver on our commitment to carbon risk disclosure
We continue to respond to the CDP Climate Change Survey and have maintained our National Carbon Offset Standard Certification.
In 2019 we signed up to the UN Principles for Responsible Banking.
We will also undertake further transition risk scenario analysis on coal-related sectors which will help us map transition pathways for coal-related sectors.
1. Commitments 3, 4 and 5 adopt three of the CDP (formerly the Carbon Disclosure Project)-led “We Mean Business” Coalition global climate change commitments.
2. Data Source: BloombergNEF Country Profile for Australia - Top Renewable Energy Players (2004 to 3Q 2019).